India Trade Balance

India: Exports expand in April, trade balance deficit narrows

May 16, 2014

The trade deficit totaled USD 10.1 billion in April, which was narrower than the USD 17.7 shortfall recorded in the same month last year. In the 12 months up to April, the trade deficit totaled USD 130.8 billion, which marked an improvement over the USD 193.2 billion shortfall seen in the same period of last year and represented the smallest shortfall since May 2011.

A combination of an expansion in exports and a sharp drop in imports drove April's improvement in the trade balance. Overseas sales expanded 5.3% over the same month last year, which contrasted the 3.2% contraction recorded in March. Imports decreased 15.0% in April (March: -2.1% year-on-year). Following March's moderation in the contraction of imports, April showed a return to the double-digit contractionary pace that was in place in the six months up to March. The strong government-imposed continued to curb on gold imports, which drove the contraction in April.

Operating conditions in India’s manufacturing sector were less upbeat in January from the previous month, with evidence suggesting that the Goods and Services Tax (GST) remains a risk to business performance as firms face delayed payments.